-1-

Luận văn thạc sĩ
Kế hoạch phát triển chiến lược của Ngân hàng đầu tư
và phát triển BIDV giai đoạn 2015-2020
THESIS MBA

PLANNING DEVELOPMENT STRATEGY FOR
BANK FOR INVESTMENT AND DEVELOPMENT
OF VIETNAM (BIDV), PERIOD 2010 – 2015


GRIGGS UNIVERSITY
GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION
PROGRAM

CAPSTONE PROJECT REPORT

Planning development strategy for Bank for Investment and
Development of Vietnam (BIDV), Period 2010 – 2015


ACKNOWLEDGEMENT

We would like to send our great thanks to teachers of VNU, who have taught
us with the enthusiasm and helped us have precious knowledge during the time of
studying the program. We also express our thanks to specialized team who have
read, given advices and instructed us during the study and completion of the project.
In addition, we would like to send our deep gratitude to the Bank for Investment
and Development of Vietnam, head office, Hanoi, Ha Thanh, Hung Yen branches
having helped and created favorable conditions so that we can obtain necessary


1.2. Definition and role of strategic planning

17

1.2.1 Definition of strategic planning

17

1.2.2. Role of strategic planning

17

1.3. Strategic planning process in enterprise

17

1.3.1. Defining strategic objective

18

1.3.2. Analyzing internal and external environment of the enterprise

19

1.3.3. Analyzing and selecting strategy

29

CHAPTER II.

33

2.1.3. Business activities of BIDV

34

2.1.4. Organizational structure of BIDV

34

4


2.2. Analysis on business environment of BIDV

35

2.2.1. Macro-environment

35

2.2.2. Industry environment

43

2.2.3. Determining opportunities and threats

46

2.3. Analyzing the internal environment of BIDV


2.5. Analysis of strengths and weaknesses

68

2.5.1. Strengths

68

2.5.2. Weaknesses

69

CHAPTER III:
DEFINE THE DEVELOPMENT STRATEGY OF BANK FOR
INVESTMENT AND DEVELOPMENT OF VIETNAM FROM

72

2015-2020
3.1. Target, trend, mission and vision of BIDV

72

3.1.1. Governmental target and trend of Bank in general

72

3.1.2. Objectives, orientation and vision of BIDV



78

3.3.2. Form the strategy in SWOT matrix

81

3.4. Strategic solutions

82

3.4.1 Healthy finance, profitability, financial status enhancement, risk
reserve and indicator assurance
3.4.2. Restructuring organization and management, as well as
improving administration capability

82

85

3.4.3. Develop service product and modernize banking technology

87

3.5. Functional strategy

90

3.5.1. Develop retailed banking service


96
97

6


ABBREVIATED TERMS

Abbreviated

English

Vietnamese

word
WTO

World Trade Organization

Tổ chức thương mại thế giới

DN

Enterprise

Doanh Nghiệp

NH

Bank


Hội Đồng Quản Trị

Association of Southeast

Hiệp hội các quốc gia Đông Nam Á

ASEAN

Asian Nations
Bank for Investment and

Ngân hàng Đầu tư và Phát triển Việt

Development of Vietnam

Nam

NHNN

State Bank of Vietnam

Ngân Hàng Nhà Nước

DPRR

Reserve Ricks

Dự phòng rủi ro


Figure 2.2: BIDV’s Value chain

43
68

8


Charts

Page

Chart 2.1: GDP growth and GDP per capita in 1998-2007

36

Chart 2.2 : Interest rate change in 2008

37

Chart 2.3 : Prime interest rate of State Bank in the last months of
2008

38

Chart 2.4: Exchange rate of Vietnam dong over USD in 2003-2008

39

Chart 2.5: Inflation in the period of 1995-2007


Table 2.6: Income structure for phase 2005 – 2010

65

Table 2.7: Market share of BIDV

69

Table 2.8: Targets of strategy performance in phase 2005-2010

70

Table 3.1: SWOT matrix of BIDV

79

PREFACE

10


A. Reason for choosing the Subject:
Business strategy is always one of the important factors affecting the survival
and development of an enterprise. Especially in a period when the competitiveness
and economic crisis is as critical as now, the future of an enterprise more and more
depends on whether that enterprise has a good business strategy or not. On the other
hand, besides Vietnam become a member of the World Trade Organization (WTO),
our enterprises are facing with new challenges; the competitiveness is not only
among domestic enterprises but also among foreign ones.

C. Object and scope of the study
Object and scope of our study is the Bank for Investment and Development of
Vietnam and Banking industry in Vietnam, respectively.
D. Studying method
In order to complete the thesis, various studying methods have been used by
our group including statistics, analytical method, method of consulting experts,
observation and interview, etc.
E. Structure of the Thesis
Besides the overview, conclusion, table of contents, and references, the thesis
is divided into three parts.

Chapter I: Overview of strategic management and strategy planning in
an enterprise.
Chapter II: Analyzing internal and external environment of the Bank for
Investment and Development of Vietnam.
Chapter III: Strategy planning with the Bank for Investment and
Development of Vietnam in the period 2010 - 2015.
CHAPTER I.
FUNDAMENTALS OF STRATEGIC MANAGEMENT AND
STRATEGIC PLANNING IN ENTERPRISE
12


1.1. Definition and role of strategic management
1.1.1 Definition
The term Strategy comes from two Greek words “stratos” (meaning an army)
and “agos” (meaning to lead, to guide to move) referring to large and long-term
plans on the basis of analyzing strengths and weaknesses of opponents, first of all, it
is used in military. Since then, the term business strategy is used, in traditional
viewpoint; strategy is the determination of basic long-term goals and objectives of

Fred R. David5 defined strategic management as: “Art and science of
formulating, implementing, and evaluating cross-functional decisions that enable an
organization to achieve its objectives”.
John Pearce II and Richard B. Robinson6 defined strategic management: “as
the set of decisions and actions that result in the formulation and implementation of
plans designed to achieve a company’s objectives”.
Thus, like any management progress, strategic management includes planning,
organization, implementation and supervision of implementation. Management
object here is the environmental impacts (opportunities, mishaps) and the way
which enterprises respond environmental impacts (by efforts of all sections in
enterprise). In other words, strategic management comprises general planning
activities, implementation, supervision and adjustment of strategic management in
order to ensure that enterprise always takes full advantage of all opportunities,
chances as well as limiting or avoiding threats, risks on the way of implementing its
objectives.
1.1.2. Role
Strategic management helps enterprise orient clearly strategic visions,
missions, and its objectives, or otherwise helps enterprise realize its objective and
direction to select the way to achieve objectives proposed at the same time strategic
management shows the position of enterprise in implementing these objectives.
Strategic management helps enterprise recognize opportunities, risks from
external environment, strengths, weaknesses in current enterprise to promote strong
point and minimize weaknesses in order to take advantage of opportunities and have
solutions to prevent from threats outside, helping enterprise in choosing the best
strategy suitable with environment and business situation. This is very important
especially in more and more complicated, continuously changed and critical
environment all over the world.
5

Fred David (2006), Translation version: Strategic management Concepts, Statistics Publisher, p. 9.

to achieve
objectives

Improve/
change if
necessary

Perform
and run
selected
strategies

Improve/
change if
necessary

Assess
performance,
repair and
adjust

Restore
1,2,3,4
if necessary

1.2. Definition and role of strategic planning
1.2.1 Definition
Planning is one of the most significant and basic operations of managers. The
term planning is generally construed as drafting and completing ideas and projects.
Strategic planning is the determination of objectives of organization, construction of

external environment to determine chances and challenges, and then, analyze
internal environment to define strength and weakness of enterprise in order to
analyze and select reasonable strategies.

Figure 1.2: Strategic planning process in enterprise

16


1.3.1. Defining strategic objective
Each organization needs define one own specific mission (task). Mission is
read as the reason for existence and operation of company, answer to question
“What must we do?”; “Why do we do business?”
In terms of company’s tasks, product, market, customer, technology, profit,
community image, staff and business philosophy are usually mentioned. In order to
define these missions, company needs find out the answer to the following question:
1. Customer: Who is company’s customer?
2. Product or service: What is the main product and service of company?
3. Market: Which market does company focus on?
4. Technology: Does company pay attention to technology development?
5. Attention to existence, growth and profit: Does company undertake to gain
financial stabilization and growth?
6. Business philosophy: What are the recognized key values, basic beliefs,
aspiration and priorities in terms of business ethics of company?
7. Self-assessment: What is the competitive benefit and special capacity of the
company?
8. Attention to image before community: How does company meet demand for
social and environmental issues?

17

Income per capita: Increase income per
capita will lead to increase in demand, quantity,
and quality of goods, make customer’s taste change.
Inflation factor, foreign exchange rate, fiscal policy also influences

18


business strategy of enterprise.


In terms of government, politics and law:

Enterprise must comply with regulations of the government and law so the
regulations on tax, safety and environmental protection, import-export policies,
industrial ownership protection and socio-political stabilization and so on also
impact on enterprise’s strategy.


Social factors:

Consumption characteristics, life style or culture of each region, locality will
take effect on taste, demand of customer there in terms of variety, model and quality
of goods.
Population increase speed impacts directly on amount of demand, increases
goods consumption market, thus influences positively enterprise’s strategy.


Natural factor:


Strategic group is a group of companies applying one same or similar strategy
in one certain target market. Determining to which strategic group enterprise is
belonging will help strategic planners narrow sphere of main competitors with
which enterprise must cope. Different strategic groups will create various barriers to
entry industry.

• Model of five competitive forces
Michael E. Porter, Harvard Professor, proposed one framework to help
managers recognize opportunities and risks with which enterprise must deal in one
industry. This framework is called “The five competitive forces that shape strategy”
as Figure 1.4.
Figure 1.4: Model of five competitive forces of Michael.E.Porter8

8

Garry D. Smith, Danny R. Arnold, Boby R. Bizzell, Translator: Bui Van Dong (2003),
Business strategy and policy, Statistics Publisher
20




Risks of reducing market share from new competitors (Potential
entrants):

When potential entrants take part in industry, market share, profit of enterprise
will reduce. To maintain its competitive position, enterprise must increase barrier to
entry industry through solutions such as product diversification, scale advantage, etc
or access to distribution. Moreover, policies of the government, intellectual property
right, or accessibility to material resources also create barrier to entry industry of


Threats of substitute products or service :

Substitute products are products meeting one demand of customers such as
product of enterprise. Substitute products can put pressure on competitive
enterprises in terms of price, quality of products-services, function – performance of
products, model of new product, new consumption trend.


Industry competitors:

Existing competitors is enterprises currently operating in one operation
industry. Analyzing existing competitors helps enterprises define competitive level
between enterprises in the same industry. There are three main factors impacting on
competitive level between enterprises in the same industry, i.e. industry structure,
demand and industry exit barriers.
• Industry structure

22


Industry structure is distribution in terms of number of enterprises with
various scales in the same business and production industry. Generally, in
decentralized industries include a large number of small and medium-size
enterprises operating individually and independently, competitive level will be
fiercer, there is no enterprise playing the dominant role of the whole industry and
competition in prices arises easily. In contrast, the centralized industry includes a
small number of enterprises, most large-size ones and even one dominant enterprise
of the whole industry, competitive level in these industries is not fierce as
decentralized industries but difficult to analyze and predict.

another industry. Administrative procedures are complicated, cost enterprise a
lot of time and effort.
From analyzing factors of external environment, enterprise will recognize
opportunities and potential risks. Opportunities will be levers helping enterprise
develop but risks damage existence and development of enterprise.
1.3.2.2. Analyzing internal enterprise (IFE)
Analyzing internal enterprise is to find out strengths and weaknesses of
enterprise in order to define distinguishing capacities of enterprise in industry.This
is the basis for enterprise to build suitable business strategy.
It focuses on analyzing functional activities such as: production, marketing,
R&D, human resources, accounting finance, organization order and discipline, etc.
In order to assess operation situation of functional parts in enterprise correctly,
managers need analyze functional parts in its movement process, that means
analysis of these factors in context that operation activities is in “value chain” of
enterprise.
Value chain is the systematic related activities of enterprise to increase value
for customers. Value chain includes two main operation groups: main activities and
supplementary ones.

Figure 1.5: Value chain

24


Input
Supply
Activities

• Main activities: directly impact on value of the product and services
(creating value) including input activities, production, output activities, marketing

important activities of the enterprise.
• Supporting activities: are activities affecting indirectly product and
service value (adding more value).


Infrastructure of the enterprise:

25